FHA Mortgage Blog

The Problem
Two major factors are

making it next to impossible for most of America’s homeowners to refinance their properties: tightening credit market and declining home

values.

Banks and mortgage lenders providing conventional loans are reducing loan-to-value (LTV) requirements across the board. The

decline in property values in most parts of the nation have brought on these stricter guidelines. Refinance programs that once allowed 80% LTV

are now requiring 75% LTV. Mortgages to purchase a property that required no down payment (or maybe 5%) now require 10% or

more.

Scenario
In 2005, your loan officer refinanced your $225,000 mortgage into a 3 yr adjustable rate mortgage

(ARM). Your property was worth $300,000 putting you a little over 65% LTV.

In 2008, your ARM is about to adjust, increasing your

monthly payment by $475. You start the refinance process and find that your property value has dropped to $245,000, raising your LTV to 92%

and disqualifying you from a conventional loan. You are now stuck with an adjusting, high-rate mortgage payment.

The

Solution
The Federal Housing Administration (FHA) has stepped in with some programs to help alleviate this problem and provide

relief for homeowners.

Inherently, the FHA insures high loan-to-value (LTV) mortgages – as high as 97.5% of the property’s value. Here

are some general guidelines on how FHA mortgage programs can help.

Up to 97.5% LTV
• Purchasing a Home
• FHA Streamline

Refinance
• Rate & Term Refinance (no cash-out or debt consolidation)

Up to 95% LTV
• Cash-out and/or debt

consolidation refinance with no late payments on your mortgage in last 12 months
• Rate & Term Only refinance with late payments (must

be manually underwritten)

Up to 85% LTV
• Cash-out and/or debt consolidation refinance with 1 late payment on your mortgage

in the last 12 months

To learn more about what you can qualify for, it is important to speak with a HUD licensed FHA mortgage

specialist. Visit www.fhamortgagedirect.com for more information.

An FHA streamline refinance allows you to reduce your rate

without the hassel of the entire the loan process. In most circumstances, the following are not required:

• No

  verification of credit

• No verification of employment
• Appraisal optional (talk with your FHAMortgageDirect.com

  agent to learn more)

An important facet of an FHA streamline is that you will have to re-impound your tax and insurance.

However, you will get a refund from your current mortgage company on any unallocated funds. Other standard fees are required like upfront

mortgage insurance, title and escrow, and a lenders admin fee.

Generally speaking, you can fund your new, lower rate FHA mortgage within

5-7 business days after FHA Streamline Application has been received. Visit

href="http://www.fhamortgagedirect.com/">www.fhamortgagedirect.com to learn more.

Private mortgage insurance is becoming more popular by the

day as values of homes are decreasing. When you have less than 20% equity in your home, you are going to pay monthly mortgage insurance (MI)

until values go back up and you can show that you have 20% equity or more.

So that is what PMI, MI, MMI is: just mortgage insurance.

Due to the high risk of high loan-to-value mortgage, mortgage companies demand that you get insurance in case you default on your loan.

UPMI is given with every FHA loan. The typical charge for UPMI is 1.5% of the loan amount. Since FHA is the only goverment agency

that is not funded by our taxes, that 1.5% is paid to keep the doors open for FHA and provide mortgages for America’s homeowners.

If you currently have an FHA loan that is above 7.25% or an

FHA adjustable rate mortgage, you can take advantage of an FHA Streamline Mortgage. With this product, FHA can lower your rate to as low as 6%

in today’s market. In most cases, no credit check or appraisal is required. Every lender is gearing up for the FHA come-back with this

product!

Staring at financial dangers, the Federal Reserve announced

a solution on Tuesday that would pour as much as $200 billion into banks and investment houses, allowing them to put up risky home-loan

packages as collateral. This announcement caused the stockmarket to respond with the biggest rally since 2002, helping to bring liquity to the

housing market.

Investors are afraid to buy loans; therefore, lenders are afraid to lend out money for mortgages. Hopefully the Fed’s

game plan will bring circulation back into our economy.

Someone once said, “I would rather have rates at 10% and some people were able

to borrow it, as opposed to rates at 5% but no one was able to borrow any.”

There are a few easy steps to see if you can save your

home.

Step 1)
Go on https://entp.hud.gov/idapp/html/hicostlook.cfm and

type in your county and state, and find out if your current loan fits under the FHA loan limit law.

Step 2)
Make sure you have at

least 5% equity in your home. I suggest you call an appraiser in your area who is FHA licensed to do an appraisal and find out.

Step

3)
Make sure you have can prove two years worth of income, and if there is more than one borrower on the loan make sure they can prove their

income too.

Step 4)
Make sure the only reason why you can not pay on your mortage anymore is because your loan is adjusting and you

cannot afford the payment, (if you have a negative amortization loan get out before you lose the last 5% of your equity)

Step 5)
Go

onto fhamortgagedirect.com and fill out an application under fha secure progam before it’s too late!

Homeowners across America are having a tough time

refinancing their mortgage due to the declining real estate market. Because of the declining market, banks are cutting 5% off of the equity

approval - meaning loans that were normally at 80% loan-to-value are being cut to 75%. Mortgage programs that required 5% down are now

requiring 10% down.!

But with FHA loans - there is hope! The FHA programs offered by

href="http://www.fhamortgagedirect.com/">www.FHAMortgageDirect.com do not cut value!

• If you have one morgage late you

  can pull cash out up to 85% loan-to-value

• If you have no lates you can pull up to 95% loan to value
• If you buy

  a house you can put less then 3% down to qualify.

FHA mortgage programs are allowing people to save their homes and buy new

ones without being subjected to the credit and real estate markets.

Before the big subprime market showed up on the scene FHA

loans were key to help people with imperfect credit or even no credit. With FHA programs, people with no credit or bad credit can qualify to

buy a home with almost no money down. People can refinance their home up to 95% cash out even if their credit score(fico score) is below

500!

Some key guidelines to FHA mortgages that you should know are:

• If you are trying to buy a house, you need to put

  down at least 2.25% of the purchase price as a down payment, make sure you are within FHA loan limits, and be able to prove income.

• If you are trying to refinance, you can have one mortgage late in a year and pull 85% cash out. If you have no mortgage lates you can pull

  up to 95% cash out. But, don’t forget you have to be able to prove income!

IMPORTANT NOTE: FHA is not based on credit, but

rather the ability of the person to pay back the loan!.

With the current state of the credit markets and the rise of FHA loan limits,

FHA loans will become very popular again.

Due to the high rate of foreclosures, the goverment has

stepped in to be “the hero” for America’s homeowners. If you owe more than the value of your home or you have received one of those negative

amortization loans, it may seem like refinancing is out of the question. But don’t worry - there is hope for you!

However, there are a

few guidelines that you must have for the goverment to help you. The main reasons the government will help save your home are:

1. You fell behind on your payment AFTER your mortgage went adjustable
2. You do not have enough equity to refinance your

   home.

I think after the goverment raises the FHA loan limits it will save thousands of homeowners out there on the brink of

foreclosure.